The government plans to sell 315.8 million shares in Coal India on Friday with an option to sell another 315.8 million in the auction.

The disinvestment will take place amid a section of trade unions threatening symbolic demonstration on Friday to protest against the share sale. (Photo: Reuters)

The government on Thursday fixed the floor price for share sale in Coal India on Friday at Rs 358 per share share, which may help the exchequer garner about Rs 22,600 crore in the biggest stake sale.

The floor price or minimum selling price is nearly 5 per cent below CIL's closing price of Rs 375.15 a share on Thursday.

The government is selling 31.58 crore shares, or a 5 per cent stake, in a public offer with an option to sell another 5 per cent through offer for sale (OFS) or auction route. CIL has reserved 20 per cent shares for retail investors who will also get 5 per cent price discount.

"The President of India, acting through and represented by the Ministry of Coal, Government of India is the promoter of Coal India (the Seller) has now informed the BSE that the floor price for the Sale in terms of the SEBI OFS Circular shall be Rs 358 per equity share of Coal India Limited (the 'Floor Price')," CIL said in a filing to the Bombay Stock Exchange.

The divestment in Coal India would be the country's biggest share sale ever and would help make up for more than half of the stake sale target of Rs 43,425 crore for current financial year.

CIL would be the second company to hit the markets under the government's disinvestment programme. The disinvestment will take place amid a section of trade unions threatening symbolic demonstration on Friday to protest against the share sale and also warned of a possible strike at a later stage.

With only Rs 1,715 crore being raised in the 2014-15 fiscal by way of disinvestment, the government is looking at aggressively selling stakes in other public sector undertakings (PSUs) to help meet its fiscal deficit target of 4.1 per cent of GDP for the ongoing financial year.

The government currently holds 89.65 per cent stake in Coal India, which was listed through a record initial public offering (IPO) in October 2010, raising Rs 15,199 crore. At the IPO price of Rs 245 apiece, the issue was over subscribed 15 times.

The other major stake sale lined up is in Oil and Natural Gas Corp (ONGC), but the global slump in oil prices have dampened the company's prospects.

The ONGC stake sale was to give the government at least Rs 15,000 crore. To overcome the shortfall, it has lined up a host of companies including NMDC, Indian Oil Corporation (IOC), Bharat Heavy Electricals (BHEL), National Aluminium (Nalco) and Dredging Corporation (DCIL).

Stake sales of five per cent each in PFC and REC are also on the cards.